FB Stock Forecast 2019: Can the Social Media Giant Recover?

Facebook, Inc. (NASDAQ:FB) stock forecast 2019
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FB Stock Forecast for 2019

This was a terrible year for Facebook, Inc. (NASDAQ:FB). There’s simply no denying it. Revenue slowed, its stock price plummeted, and the world bared its collective teeth at the social media giant that has, for all intents and purposes, lied and misrepresented how it uses and trades people’s data.

I mean, just when you thought that 2018 couldn’t possibly get any worse for FB stock, the New York Times drops another bomb on the company.

This time, a report states that Netflix, Inc. (NASDAQ:NFLX), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and others were involved in a number of surreptitious deals with Facebook that would allow outside companies to read private messages from Facebook users and otherwise gather data that Facebook had earlier claimed it doesn’t sell. (Source: “As Facebook Raised a Privacy Wall, It Carved an Opening for Tech Giants,” The New York Times, December 18, 2018.)

The word “sell” is important; it turns out that Facebook often traded information away rather than directly selling it for money, all in an effort to gain more information about its own users.

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As far as most are concerned, it’s another slap in the face to consumers everywhere who use the platform and expect at least a modicum of privacy.

FB stock’s bad press culminated in the now-infamous public grilling of CEO Mark Zuckerberg when he appeared before Congress.

And that’s only the tip of the iceberg. Fake news, media bias, Russian bots, election hacking, dubious PR strategies, privacy abuse, etc.—the list of Facebook’s misdeeds this year is long. (Source: “Facebook’s Stock Plunge Shatters Faith in Tech Companies’ Invincibility,” The New York Times, July 26, 2018.)

All this bad news only cemented the Facebook stock collapse when the company’s second-quarter earnings report in July underperformed.

That poor financial report led to FB stock’s biggest shakeup yet. The stock took a 19% drop in a single day, wiping out roughly $120.0 billion of shareholder wealth—one of the highest single-day falls that a company has ever faced.

Facebook executives have long warned that a slowdown was inevitable (I remember them cautioning investors way back in early 2017) and yet, few were willing to listen. Or at least, it wasn’t enough to dampen expectations.

The combination of bad optics and bad financial numbers has created a horrible situation for the company, leaving its stock down about 25% on the year.

While many tech stocks have been struggling lately, the Nasdaq 100 Index is only down a relatively soft two percent on the year.

Chart courtesy of StockCharts.com

Compared to its fellow “FANG” stocks (Apple, Netflix, and Google/Alphabet), Facebook has by far had the weakest year among them.

Chart courtesy of StockCharts.com

With all that in mind, does this mean FB stock is doomed, or is there hope in the Facebook stock forecast for 2019?

Can Facebook Stock Recover?

I believe that—despite how bleak the picture may look now—there’s still hope for FB stock.

This is based on number of factors, with the most pertinent being whether a heavy recession is in store for us.

While indicators are showing that a stock market pullback may in fact be on the horizon, I believe that—recession or no recession—there’s still a great chance to make money from FB stock in the long term.

That’s the thing about the Facebook stock forecast for 2019: if you’re aiming for immediate returns, look elsewhere.

That isn’t to say that FB stock has no chance of recovering in 2019—far from it. It’s just that Facebook is one of the riskier plays for those looking to make quick gains.

There are three main scenarios that could play out in the coming year (huge news events notwithstanding):

Facebook Stock Rallies

In this scenario, Facebook stock would return to its former glory after having experienced a down year.

A good comparison is the recovery of Volkswagen AG (OTCMKTS:VWAPY, ETR:VOW) after its run-in with, admittedly, a far worse scandal (emissions testing fraud and lying to regulators).

In any case, Volkswagen stock suffered mightily in the immediate aftermath, then began to make steady climbs in the years that followed, up about 50% from its low point.

This scenario could play out with Facebook stock as well, although I would predict that the FB stock gains would be far greater than those experienced by Volkswagen, with a potential 30%–50% gain in 2019.

This is the most optimistic outlook and, frankly the least realistic. It’s still possible, but I wouldn’t say it’s very likely.

Still, for those diehard FB stock fans—and those who believe that the market will hold—getting in now on FB stock could pay off with huge yields.

Facebook Stock Falters

This possible situation involves more scandals, more disappointing financial numbers, and more lost stock value. The silver lining is that Facebook is still a powerhouse company, regardless of any troubles on the horizon.

The company is getting into the dating space, the gaming space, and a number of other neat additions to its platform like direct selling. There’s a lot that could help turn FB stock around at any moment.

In fact, if this comes to pass, it could be a good idea to gobble up Facebook at its nadir and hold for the next few years to see huge, possibly 100%-plus returns.

I’d put the chances of this happening about on par with the previously-mentioned scenario. Both are possible realities in the FB stock forecast for 2019, although neither is particularly likely.

Stock Market Falters

The most likely scenario in my mind is that the stock market slows in 2019, leading to a smallish down year for FB stock.

This would provide a lot of opportunity for long-term investors. Buying Facebook stock in a down year would certainly pay dividends in the near future, and much nearer than many might think.

All of the reasons to be optimistic about this stock for the long term still hold. If the wider stock market falters rather than FB stock itself, I foresee big gains on the horizon for the company.

Analyst Take

Facebook is in a difficult position. This year has been punishing for the company, and deservedly so.

But there is still so much to love about Facebook stock that my FB stock forecast for 2019 can’t help but be positive.

Whether next year sees gains is irrelevant to buy-and-hold investors; this still looks like a great stock to have in your portfolio if you want reliable, lasting gains for years to come.